Saturday, February 13, 2010

Weekly Nifty Update 12 Feb, 2010 by Tanmay G Purohit

Nifty has closed positive +69 points at 4826 which is first positive close in last 4 weeks and market has shown quite a resilience to negative global market cues. Nifty was gap-down on Friday 5th Feb, but now the gap is closed and once we sustain past 4850 a swift rally towards 4950-5000 is possible. Nifty has time and again shown good support near 4700-4730 levels and below that we have 200DEMA which is 4659 which can be a crucial support too, so the downside looks limited. Budget is driving the trends in individual stocks and this week belonged to PSUs as HIND COPPER, STC, NMDC rose more than 5% each. IBREALEST, SESA GOA, CHAMBAL FERT, LITL were prominent gainers this week while DR REDDY, GUJ NRE COKE, REC, PFC saw profit-taking as they lost above 4% each. UNITECH was top gainer in Nifty with 8% gains.

Food price index rose 17.94% in the 12 months to Jan 30 Vs 17.56% in previous week as per government data. India's annual wholesale inflation picked up to 7.31%t in December 2009, compared with 4.78% in November. India's finance and oil ministers will meet on February 14 to discuss fuel pricing and subsidies, as per news reports and we have to see if really fuel prices are going to be raised and we get deregulation or something else, stocks in action would be GAIL, ESSAROIL, RIL, HPCL, OIL, BPCL, IOC. India's exports in January rose 11.5% to $14.3 billion, Trade Minister Anand Sharma said. The Reserve Bank said it is not going to change its policy rates or other tools, which have a bearing on interest rates, till April 20 when it comes out with its annual monetary policy for next fiscal. The Indian economy is expected to grow 7.2% in the financial year through March, the government said in its advance estimate, the growth would still lag China which grew 8.7% in 2009 but would be enough to maintain 2nd largest economy status. Steel consumption rose 7.9% to 45.93 million tonne during April-January in the current financial year over the same period a year ago and as per Steel Minister India will become 2nd largest steel producer by 2012.

India's industrial output rose at a faster-than-expected 16.8% in December from a year earlier, helped by stimulus measures that boosted domestic demand, data showed. The median forecast in a Reuters poll was for an annual rise of 12%. This is a very positive surprise and next week we may have a strong start but markets are still in consolidation mode and no big fall or big rally seems until budget so if one has bought in dips, one can slowly take profits when we see good rise. Nifty has to sustain above 4850 for further move else once again selling is not ruled out. But given heavy shorts in the system it is covering which can boost the indices further.